Sutcliffe joins Liberty

Johannesburg - A year after he stepped down as CEO of dual-listed insurer Old Mutual, Jim Sutcliffe has resurfaced as a non-executive director at another life insurer in need of a strategic overhaul.

Sutcliffe, who fell on his sword in September 2008 after problems began mounting at Old Mutual, is to sit on the board of Liberty Holdings as well as on the risk, audit and actuarial committees of the company. His appointment is effective from September 14 2009.

Sutcliffe stepped down as the head of Old Mutual after losses began to rise in the company's US life operations.

He had also put Old Mutual's short-term insurance subsidiary Mutual & Federal (M&F) on the chopping block. However, shortly after Sutcliffe stepped down, his successor, Julian Roberts, took M&F off the market and began a strategic realignment of the business to focus on its highly profitable South African operations.

Commenting on the appointment Liberty told Fin24.com: "Sutcliffe brings a wealth of local and international industry experience and knowledge which, complemented by his actuarial background, will bring valuable expertise to the board. Sutcliffe's experience includes eight years as CEO of Old Mutual Group and was CEO of Prudential UK from 1994 - 1997."

Liberty itself needs a strong management team to carry it through a slump.

Its chief executive, Bruce Hemphill, was lambasted by analysts when the group announced in July that it had lost around R1.2bn for the first six months of the trading year.

The losses had been attributed to a hedging strategy which had gone awry after the group had taken a view that equity markets would continue to fall and that the rand would weaken against the dollar - neither of which has happened since the positions were entered into.

Stanlib, the asset management subsidiary of Liberty, also remains without a dedicated head after former CEO George Brits stepped down in July. In the interim, Liberty deputy CEO Rex Tomlinson was appointed as acting CEO.

Analysts and market commentators were wary of commenting on Sutcliffe's appointment, noting he would be operating in a non-executive role and would not necessarily participate in day-to-day management decisions. However, they pointed out that the running of insurance businesses was complicated and required professionals who understood the sector.

This was emphasised in an analyst report released in August by Henry Hall from Citigroup. Hall questioned whether the present leadership at Liberty was necessarily the right team. Hall wrote to clients: "We wonder if Standard Bank's move to opt for a banker [Hemphill] to run a company in the complicated life insurance industry was the right decision."

- Fin24.com